House passes homeowner tax bill

The House approved a mortgage debt tax forgiveness bill by a 386-to-27 vote on Thursday.
The bill known as the Mortgage Forgiveness Debt Relief Act will give a tax break to homeowners who have mortgage debt forgiven as a result of a foreclosure, short sale, or by reworking a loan.  The value of that forgiveness, which is currently taxed as 1099 income, would be tax-exempt under this new law.

To ease some of the tax income loss, the bill also limits the tax breaks currently given to people selling their second home.